Lloyds' 4 year Fixed Rate NISA

waynum

I transferred the majority of my savings from a Lloyds' Cash ISA to a Lloyds' NISA with a 4 year Fixed Rate. I did this for the slightly higher interest rate.
I was under the impression that the term fixed rate meant the interest rate was fixed for the length of the stated account.
On withdrawing £500, however, I was charged a fee of £7.89. When I later questioned this I was told that it was 320 days interest of the amount withdrawn.
On opening the account I can't remember any such condition being applicable and now I can't find the conditions to check. The write-up on the Lloyds' 4 year Fixed Rate is no longer there.
Even though the fee amount isn't much I still find myself feeling cheated by Lloyds and to counter the fee ever happening again I opened an Instant Access savings account and I'm building a buffer fund in there in case I ever need cash in a hurry. I'm feeling cheated because unless the interest rates rise to somewhere around 6% then the fees involved to remove my cash from the NISA and put it in a better account with someone else simply wouldn't make the transaction worthwhile to me.

I've got nothing against Lloyds, per se, and I do like carrying out my banking online and all in the same place but in the same token I can't shake off this feeling cheated aspect. If the words were clearly there telling me of the condition about being charged 320 days interest on withdrawals then I'd take it on the chin as my fault and realise I must have missed it but the fact they're not has me questioning whether I should involve a solicitor to work on my behalf. I would have noticed such a condition, you see, and it would have led to me holding some of my savings back in case they were needed so as to ensure I wouldn't be charged such a fee.
Do I have any legal rights which help me out in this circumstance or is there some good advice to help me work around having my savings tied up for the remainder of the four years? I know I could withdraw it all and suffer the fees but I don't choose to do this as savings are supposed to provide interest and not cost me for the privilege of wanting them in a better account.

Gram_Parsons

It's standard with fixed rate deals that there is a penalty of lost interest if you want to withdraw money. Like it or not, that condition would have been there somewhere. I always keep the PDFs of all the account terms I apply for.

Ed-1

waynum wrote: »

I transferred the majority of my savings from a Lloyds' Cash ISA to a Lloyds' NISA with a 4 year Fixed Rate. I did this for the slightly higher interest rate.
I was under the impression that the term fixed rate meant the interest rate was fixed for the length of the stated account.
On withdrawing £500, however, I was charged a fee of £7.89. When I later questioned this I was told that it was 320 days interest of the amount withdrawn.
On opening the account I can't remember any such condition being applicable and now I can't find the conditions to check. The write-up on the Lloyds' 4 year Fixed Rate is no longer there.
Even though the fee amount isn't much I still find myself feeling cheated by Lloyds and to counter the fee ever happening again I opened an Instant Access savings account and I'm building a buffer fund in there in case I ever need cash in a hurry. I'm feeling cheated because unless the interest rates rise to somewhere around 6% then the fees involved to remove my cash from the NISA and put it in a better account with someone else simply wouldn't make the transaction worthwhile to me.

I've got nothing against Lloyds, per se, and I do like carrying out my banking online and all in the same place but in the same token I can't shake off this feeling cheated aspect. If the words were clearly there telling me of the condition about being charged 320 days interest on withdrawals then I'd take it on the chin as my fault and realise I must have missed it but the fact they're not has me questioning whether I should involve a solicitor to work on my behalf. I would have noticed such a condition, you see, and it would have led to me holding some of my savings back in case they were needed so as to ensure I wouldn't be charged such a fee.
Do I have any legal rights which help me out in this circumstance or is there some good advice to help me work around having my savings tied up for the remainder of the four years? I know I could withdraw it all and suffer the fees but I don't choose to do this as savings are supposed to provide interest and not cost me for the privilege of wanting them in a better account.

It will have been in the terms and conditions of the account so there's nothing you can do, but it's a lesson learnt. In general fixed rated accounts (i.e. those where the interest rate is fixed for the duration of the term) don't allow penalty-free withdrawals as the idea is they give you a higher fixed rate in return for locking your money away for the stated term. If fixed rate accounts were also instant access then it defeats the risk of a fixed rate. By giving you a fixed rate, the bank takes a risk that general market interest rates won't fall during the term (as they can't drop the rate) and you take a risk that rates won't rise (as the bank can't rise the rate either).

apt

Almost all fixed term ISAs have early repayment charges if they allow early repayment at all. Find the T&Cs or ask Lloyds for them. If the charge is there you don't have a case.

The Telegraph knew about the repayment charge.

http://www.telegraph.co.uk/finance/personalfinance/savings/10673030/Lloyds-raises-cash-Isa-rates-to-2.4pc.html

GingerFurball_2

No case, it's in the terms and conditions.

Archi_Bald

Courtesy of the power of Google Advanced Search:

3.4. You can make a withdrawal or transfer out to another ISA from your FRISA during the fixed rate period. If you do so, you will lose the equivalent of 320 days’ gross interest earned on the amount withdrawn or transferred. We will deduct the charge from the balance in your account before the withdrawal is made.

http://www.lloydsbank.com/legal/savings/4-year-fixed-rate-cash-isa/from14August2013.asp

badger09

Archi_Bald wrote: »

Courtesy of the power of Google Advanced Search:

Wind assisted searching Archi?

PeacefulWaters

waynum wrote: »

I transferred the majority of my savings from a Lloyds' Cash ISA to a Lloyds' NISA with a 4 year Fixed Rate. I did this for the slightly higher interest rate.
I was under the impression that the term fixed rate meant the interest rate was fixed for the length of the stated account.

The interest rate paid on money deposited is fixed.

On withdrawing £500, however, I was charged a fee of £7.89. When I later questioned this I was told that it was 320 days interest of the amount withdrawn.
On opening the account I can't remember any such condition being applicable and now I can't find the conditions to check.

If you think it through logically, it would be insane not to have a penalty clause. If interest rates went up every customer would simply move their money out of the account. At least with a Lloyds FRISA you are allowed to make additional deposits subject to ISA limits. They're the only big firm to offer this.

The write-up on the Lloyds' 4 year Fixed Rate is no longer there.

They don't appear to be selling a 48 month option at the moment.

Even though the fee amount isn't much I still find myself feeling cheated by Lloyds and to counter the fee ever happening again I opened an Instant Access savings account and I'm building a buffer fund in there in case I ever need cash in a hurry.

If you haven't read the T&Cs you've cheated yourself.

I'm feeling cheated because unless the interest rates rise to somewhere around 6% then the fees involved to remove my cash from the NISA and put it in a better account with someone else simply wouldn't make the transaction worthwhile to me.

As I've hinted at above, if the customer is free to do this there is absolutely no point offering a higher rate for a fixed rate deposit. There would be no way of retaining funds if variable rates increase.

I've got nothing against Lloyds, per se, and I do like carrying out my banking online and all in the same place but in the same token I can't shake off this feeling cheated aspect.

A mixture of laziness and naivity on your part. No cheating.

If the words were clearly there telling me of the condition about being charged 320 days interest on withdrawals then I'd take it on the chin as my fault and realise I must have missed it but the fact they're not has me questioning whether I should involve a solicitor to work on my behalf.

Drop the solicitor idea now. Waste of money and you will lose in court. If you feel that branch sales staff have in someway misled you (or failed to issue you with key brochures contain the information) then you have Lloyds' complaints process and the FOS to fall back on. Both free if you lose. Which, in all honesty, would be what should happen.

I would have noticed such a condition, you see, and it would have led to me holding some of my savings back in case they were needed so as to ensure I wouldn't be charged such a fee.

It has always been there.

Do I have any legal rights which help me out in this circumstance or is there some good advice to help me work around having my savings tied up for the remainder of the four years? I know I could withdraw it all and suffer the fees but I don't choose to do this as savings are supposed to provide interest and not cost me for the privilege of wanting them in a better account.

See above re complaints and FOS.

jimjames

Maybe you should also feel cheated that Lloyds offer 4% on an current account which could well be more than you're getting in your ISA?

waynum

jimjames wrote: »

Maybe you should also feel cheated that Lloyds offer 4% on an current account which could well be more than you're getting in your ISA?

The Lloyd's account mentioned is provided you join Club Lloyds and to do so costs somewhere around £10 a month.

Archi_Bald

waynum wrote: »

The Lloyd's account mentioned is provided you join Club Lloyds and to do so costs somewhere around £10 a month.

You don't have to join any club, it is just called Club Lloyds. The account costs exactly £5 a month if you don't deposit £1,500 a month, and it costs nothing if you do. Depositing the monthly minimum is very easy to do if you have a bit of money kicking about.

Check the T&Cs on their website and look for the thread on Club Lloyds to learn more.